Zombie Startups • businesskinda.com

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People leave their jobs for all sorts of reasons, but when it’s a CFO leaving a highly regarded company because the company is making layoffs itself, the exodus could be a sign of a bigger problem.

This was one of the takeaways I had while talking with Continuum CEO and co-founder Nolan Church about a recent spate of CFO resignations, including but not limited to OpenSea, Noom and Brex. The founder reiterated that we don’t know the exact reasons people leave, but he also noted that it’s a red flag from a recruiting perspective.

He also introduced me to the idea of ​​zombie companies, which I appreciated because it’s officially ghost season and we love a festive setting. Zombie companies are basically companies that have raised a lot of money during the boom, but are not nearly generating enough revenue to justify the valuation. The late stage market is full of them, Church said, and it will be a while before we realize this, as many are overcapitalized and have enough runway to hide behind.

It’s an interesting idea and colors why some executive shakeups sound louder than others. For more information, read my full businesskinda.com+ column, “Are CFOs OK? (Answer: Yes, but CEOs? That’s complicated).”

In the rest of this newsletter, we’re going to talk about Sarah Guo’s do-it-all startups and new venture capital fund. If you like this newsletter, will you do me a quick favor? Forward it to a friend, share it on Twitter and follow my personal blog for more content.

The do-it-all

This week I wrote about Getaway, which Pacaso puts its own spin on the vacation home ownership market. It’s hard to convince people that they deserve a vacation. Convincing people that they can co-own a vacation home and enjoy it at the same time can be deceptively more difficult.

Here’s why it’s important: If you’re a startup startup, the best way to stand out from a unicorn competitor is to try and do it all. I’ve seen a lot of startups lately that want the best of both worlds for consumers, and Getaway is no different – combining both an investment and pleasure in one product.

While I’m all for entrepreneurial energy, I wonder how this plays out with the larger conversation of growth-stage startups realizing they need to cling and focus. In other words, if the behemoths turn inward and focus on what brings them revenue, will the early-stage startups have some time to go wild thanks to buffer capital? Something to think about.

High conviction, why not?

For Equity, this week Alex and I interviewed former Greylock partner Sarah Guo about her new company, Conviction. She raised $101 million in 10 weeks for her inaugural fund, a process she says took too long but clearly resonated with some investors. We’ve taken key excerpts from the conversation for TC+, so check it out.

Here’s why it’s important: Sensational AI aside, Guo’s framework for interesting applications in this space comes in handy when trying to divide what she is and isn’t interested in. Below you can see what she thinks about it.

I think you can look very closely at the landscape and say: what is valuable to a customer? I think there’s a way to go bottom up, and be modality by modality, right? We can classify things. We can generate code. We can count. We can generate images. And I think that’s an interesting one. [But] I think my tendency to look at the world is that I’m interested in a range of problem domains that I know well because I know the customer well.

Nails, not hammers first. So you will see me investing in security infrastructure, developer tools, productivity applications, creative apps, generally business relational database applications that track data, [and] verticals where I think the vertical is big, interesting and the data is affected by it, like comp bio. The reason I think software 3.0 is a very apt term is that I only mention certain categories of software that I know well, but I don’t see a future where all those [categories]given the advancements in computing power and data and algorithms, it doesn’t get any more intelligent.

I think there will be completely new applications of AI that don’t fit well into the existing categories. Visual generation is not an existing software category. Autonomy is not a software category that exists without AI. So I think there will be net new application categories… but I follow the customer more than anything.

Image Credits: Sarah Guo

A few notes

Somehow businesskinda.com Disrupt is next week. Safe journey to those of you traveling to the city, and apologies to those of us already based in San Francisco and now Surely couldn’t get a table at Che Fico.

It will be a blast, a pep talk, a realization and a week not to be missed. Here is the full agenda and here you can buy your tickets.

Remember you can use the code “STARTUPS” for a special reader discount for Disrupt tickets. We also have a special for people affected by layoffs. If you’re fired, go here to get a free ticket to businesskinda.com Disrupt’s Expo.

As you know, I co-host Equity, which goes out three times a week and is TC’s longest-running podcast. We also have some besties to listen to: including our crypto-focused show going through Chain Reaction, and founder-focused show going through Found. The businesskinda.com Podcast should not be missing either, so watch all the good shows they put out.

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